Google’s headache does not stop at American shores, as it faces active antitrust investigations in at least 10 other countries
US district court rules Google maintains an illegal monopoly in two markets
On 5 August 2024, Judge Amit Mehta of the US District Court for the District of Columbia ruled against Google parent company Alphabet in the US Department of Justice (DOJ)’s antitrust case against the big tech firm. The case brought by the DOJ, which was filed in October 2020 and went to trial in September 2023, alleged that Google maintains an illegal monopoly in the search services and search advertising markets in violation of the Sherman Antitrust Act. Mehta’s ruling, which agreed broadly with the Government’s position on Google’s illegal monopoly, only assigned liability to the firm, and remedies and damages related to the decision will be determined in a subsequent proceeding. Google, as outlined in a statement by Kent Walker (President of Global Affairs, Google and Alphabet), plans to appeal the decision.
The ruling finds that Google actively and intentionally amassed market power and prevented competition in search and advertising
Mehta’s ruling specifically found Google to be an illegal monopolist in the general search engine market and the general search text advertising market, though it refused to engage with additional DOJ allegations that the firm destroyed evidence relevant to the case. In the search engine market, even for the largest businesses with the most buying power to influence the market, there was no effective alternative to Google’s search engine. The decision discounted Google’s argument that its practices have not changed since it first rose to a dominant market position in the early 2000s, instead noting that the same business practices used by smaller firms can be exclusionary when enacted by dominant firms. Mehta returned repeatedly to the direct payments Google made to phone and browser makers (such as Apple), estimated at $26.3bn (£21bn) in 2021, as disincentives for new entrants to the search market. In the search advertising market, the decision detailed how Google’s exclusive agreements and dominant position allowed it to raise prices irrespective of quality, suggesting that there were no competitive restraints on the firm’s effort to drive long-term revenue growth. Jonathan Kanter (Assistant Attorney General for the Antitrust Division, DOJ) described these findings as a “path for innovation for generations” and a “historic win for the American people”.
Behavioural and possibly even structural remedies are likely to be sought, in addition to the fines we’ve become used to
Both in the US and abroad, Google faces additional scrutiny for its alleged anticompetitive practices in a number of digital markets. The firm will face a second antitrust suit brought by the DOJ regarding its advertising technology business which is scheduled to go to trial on 9 September 2024. The EC is also investigating Google’s search business under its powers through the Digital Markets Act, focusing on suspected self-preferencing within the search vertical between services like Google Search and Google Shopping. Turkey’s competition authority, the Rekabet Kurumu, has issued Google three fines totaling approximately £57m since 2020 for similar self-referencing practices in the search services vertical. However, more comprehensive findings of monopolistic control like those in the DOJ’s case as well as the EC’s investigation are more likely to result in behavioural remedies being sought to Google’s conduct, if not structural separations of the firm’s activities. According to our Platforms and Big Tech Tracker, beyond the search market, Google also faces active investigations into its advertising, app store, maps and data businesses in 10 other countries. Read together, as well as in concert with other recent filings against tech firms, these cases represent a critical juncture in the evolution of how governments have come to understand and now limit the power amassed by American big tech giants in the digital economy.
